Although currencies are the largest asset class on the capital markets in terms of trading volume, many investors do not actively engage with them. This means they are missing out on opportunities. “Currencies are an untapped source of alternative returns,” says Katherina Duong-Bernet, EU Head of Business Development at Millennium Global, an asset manager specialising in currencies.
In Hedgework Talk with Uwe Lill, she explains the return potential of currencies, but also why she expects increased volatility in this segment. “Because of central bank policy plus inflationary pressures and growth prospects, we will have extreme movements in currencies.” Investors can respond to this with passive or active hedging or an active overlay.
In Hedgework Talk you will learn in detail:
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Why currencies are interesting for diversification in a portfolio
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Why risks associated with currencies are often underestimated
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What investors need to be aware of when hedging currencies
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What distinguishes dynamic hedging from passive hedging
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How currency risk premiums can be used for portfolios
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Why the end of quantitative easing by central banks can lead to currency turbulence
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Why it would be reckless not to deal with currency risks.
Source: Hedge Work
